In recent years, interest in Marx’s works has experienced something of a revival. But his theory of value, which is, I believe, of abiding relevance for a critical understanding of capitalism, has not received the attention it deserves. My purpose in this book is to present a sympathetic critique of this theory, and especially his concept of fetishism that plays such a central role within it. Some of the subject matter that follows may be thought to lie outside the scope of economics as normally understood. My concern, however, is with the basic presuppositions of the discipline: the foundations that are too often unexamined. To define the boundaries of economics is also, to a large extent, to determine how it is to be studied. In economics, as Schumpeter observed, ideology “enters on the very ground floor” (Schumpeter 1954: 42).
But suppose we did start from scratch, what are the steps we should have to take? … We should first have to visualize a distinct set of coherent phenomena as a worthwhile object of our analytic efforts. In other words, analytic effort is of necessity preceded by a preanalytic cognitive act that supplies the raw material for the analytic effort. In this book, this preanalytic cognitive act will be called Vision . (Schumpeter 1954: 41)
It is this “vision” which determines the scope of economics. At the same time it determines also its bias: “laying emphasis upon certain factors and relationships and excluding others or casting them into the shadows” (Dobb 1973: 7). Marxian economics lays its emphases very differently from “bourgeois” economics, giving recognition to “the priority of society over the individual, … the historical …, and the dominant part played by production” (Bukharin 1927). It does so self-consciously; it has the merit of questioning its own foundations. At these foundations, I suggest, is to be found a theory of value . It is reprehensible, but not perhaps surprising, that most neo-classical economists ignore the issue, treating value as identical with price, and expressing no further interest in it.
Sweezy asserted that “the marriage of the qualitative and the quantitative analyses was one of Marx’s greatest achievements” (Sweezy 1979: 21). The latter, the quantitative analysis, has—since Bohm-Bawerk in 1896—been the subject of much, largely justified, criticism; and Marxian economists have, in response, devoted “a truly astonishing amount of energy to the ‘transformation problem’” (Sen 1978: 179). I believe, however, that it is not the quantitative but the qualitative aspect of the theory of value that is Marx’s important contribution to economics. This finds expression in the concept of fetishism, which both encapsulates his critique of economic categories and provides insights into the commodity—the foundation stone of the capitalist system.
Here, I believe, lies the major importance of Marx’s critique. But Marxian economists have not, I suggest, made sufficient efforts to develop and propound this aspect of Marx’s economics. Some, such as Joan Robinson, criticised his theory of value for being “metaphysical”.1 There has been a tendency to regard this aspect of Marx’s work as falling outside the domain of economics proper: brilliant, perhaps—but to be classified as the work of “Marx the sociologist” or “Marx the philosopher”. But some do assign a crucial place to the concept of value, and agree with Dobb that this necessarily shapes economic theory as a whole:
Any theory of value necessarily constitutes an implicit definition of the general shape and character of the terrain which it has decided to call ‘economic’. (Dobb 1973: 16)
There is thus a close link between the scope and method of economics. And bourgeois economics is severely limited in both respects:
What characterizes bourgeois theory is that it takes the appearances of capitalism for granted and only studies the relationship between them. (Fine 1980: 9)
Marxian economics, by contrast, goes deeper; studying not only surface phenomena but also their foundations. Marx criticised both economic theory and the capitalist system that it sought to understand. In this book I shall argue that the importance of Marx’s theory of value is precisely that it questions the categories on which economics is founded. It is not a theory of price-formation; that is not its strength, nor even its purpose. It is necessary to understand how the capitalist economy works, in its own terms; but it is important also to critique those terms—the categories which are used to analyse, and often to justify, the capitalist system.
While I believe that the major contribution of Marx to economics is his emphasis on social relations, this is not to suggest that Marx ignored the importance of the material. Indeed, his contribution to history lay precisely here. It is something of a paradox, and a source of permanent tension in Marx’s work, that as an economist he stressed the social, while as an historian he stressed the material. It is never possible wholly to disentangle the two, but my own concern is with Marx the economist—and here, I suggest, his strength lay in his emphasis on the social: with the inner workings of capitalism, and the mystifying categories of bourgeois economics.
Interest in Marx’s writings, which was rather limited in the period from the 1980s well into the twenty-first century, has now been revived—for two main reasons. The first is MEGA2 , the massive exercise to mark the 200th anniversary of Marx’s birth by reproducing “basically all relevant material from Marx’s literary remains, only parts of which were already known” (Kurz 2018: 792). Some new insights have emerged from these endeavours—for example with regard to Marx’s writings on nature (Saito 2017). But this appears not to be the case with regard to the theory of value . In his recent article “Will the MEGA2 edition be a watershed in interpreting Marx?” (Kurz 2018), he responds in the affirmative concerning topics such as technical progress and the rate of profit, but not with regard to the theory of value, which he describes as “the cornerstone of Marx’s analysis of capitalism”, concluding that Marx “unswervingly stuck to it till the very end of his life” (Kurz 2018: 793).
But it is not only the 200 year anniversary that has revived scholarly interest in Marx. His ideas have been found by many to be relevant to pressing problems of our day, as I demonstrate in the three concluding chapters of this book. These build on the twelve preceding chapters which provide a detailed and extensive exposition on fetishism and the theory of value . The first six chapters examine why and how Marx came to g...